Canada: Looking Back – The 10 Most Important Appeals Of 2016

The Appeals Monitor is pleased to present our annual review of
the most significant appellate decisions of the past year. From
criminal law to contracts, 2016 was full of exciting developments
and we hope that you, our reader, will enjoy these summaries.

Endean: Justice to Go

In Endean v British Columbia, 2016 SCC
42, the Supreme Court of Canada
("SCC") addressed whether superior court
judges may sit outside their home provinces to hear and decide a
motion about a pan-national class action settlement.
Endean was at the top of our
Appeals to Watch in 2016 list from last year. The lower court
decisions were previously discussed
here and the SCC decision discussed
here.

The SCC held that superior court judges in Ontario and British
Columbia have a discretionary statutory power under their
respective class actions legislation to sit outside their home
provinces. The approach "reflected the inherent authority of
judges to control procedure", and served the underlying
purposes of administering class proceedings in an efficient manner.
The SCC also held that, barring a clear statutory limitation in
other jurisdictions, these principles extend to superior courts of
other provinces as well.

However, this was a case in which personal and subject matter
jurisdiction were conceded, and in which the hearing would proceed
on a paper record. The SCC left for another day the more difficult
questions of whether courts may assume jurisdiction over a national
class without attornment, and whether joint hearings can be
appropriate in instances where the exercise of coercive powers
might prove necessary, such as compelling the attendance of a
witness.

On a separate issue, the SCC also ruled that a video link
between the out-of-province courtroom where the hearing takes place
and a courtroom in the judge's home province is not a condition
for a judge to be able to sit outside his or her home province. A
superior court judge will need a "good reason" for not
using video link technology when requested; however, video link
technology is not required and its absence does not violate the
open court principle.

In this case, the municipality had issued a "notice of
reserve" that would have prevented construction on a site
where Rogers wanted to build a cellphone antenna system. Writing
for the eight-member majority, Wagner and Côté JJ held
that the notice of reserve was ultra vires the
municipality and therefore unconstitutional. The pith and substance
of the notice was directed at the location of the cellphone tower,
which was within the exclusive jurisdiction of the federal
government over radiocommunications. The SCC disagreed with the
municipality's argument that the notice of reserve was, in pith
and substance, within the municipality's jurisdiction to
protect the health and well-being of its residents. The doctrine of
interjurisdictional immunity applied because (1) the sitting of a
cellphone tower is part of the core of federal jurisdiction over
radiocommunications, and (2) the notice seriously and significantly
impaired the orderly development of radiocommunications. Justice
Gascon, concurring in the result, agreed with the majority on
interjurisdictional immunity, although he felt that the pith and
substance of the notice was in fact directed the health and
well-being of the municipality's residents.

This decision develops the legal doctrines of pith and substance
and interjurisdictional immunity, and clarifies the scope of the
federal government's jurisdiction over radiocommunications.

In a 5–4 split judgment, the SCC majority held that
reviewing courts must defer to tribunals and other administrative
decision-makers on questions of law, except where the
question of law falls within one of the following categories:

constitutional questions regarding
the division of powers;

an issue of law of central importance
to the legal system as a whole and outside the
adjudicator's specialized area of expertise;

a true question of jurisdiction or
vires; or

an issue regarding the jurisdictional
lines between two or more competing specialized tribunals.

It is only when a question of law falls within one of these four
categories that the presumption of a reasonableness standard of
review is rebutted.

The strongly-worded dissent authored by Côté and
Brown JJ criticized the majority's categorical approach and
stressed the need for a contextual standard of review analysis. The
dissent correctly stated that the majority departed from the
flexible Dunsmuir jurisprudence in favour of
an approach that "risks introducing the vice of formalism into
the law of judicial review."

Jordan: Don't Delay, Get Your Trial Today

In a decision of real importance to any person or organization
charged with a criminal or quasi-criminal regulatory offence, R v Jordan, 2016 SCC 27 radically
revamped the Charter s. 11(b) right to trial within
a reasonable time. We previously discussed Jordan
here, and discussed how the decision is being applied by lower
courts
here.

The SCC majority, in a 5–4 split judgment, set firm time
limits by which a trial must be completed. For criminal cases in
provincial courts, there is a presumptive ceiling of 18
months. For criminal cases in superior courts, or cases in
provincial courts after a preliminary inquiry, there is a
presumptive ceiling of 30 months. Delay
attributable to the defence does not count toward the presumptive
ceiling, but institutional delay that is not the fault of the Crown
prosecutor does count.

Where the presumptive ceilings are exceeded, there is a
rebuttable presumption that the delay is unreasonable and thus the
accused's constitutional rights have been violated. The Crown
can rebut the presumption by establishing that (a) delay is due to
an unforeseen and unavoidable discrete event, or (b) the case is
particularly complex.

If the presumptive ceiling is not rebutted, the charges against
the accused will be stayed. And even if the presumptive ceiling is
not yet reached, the accused can still show that the delay was
unreasonable in the circumstances by showing that it (a) made a
sustained effort to expedite the process, and (b) the case took
markedly longer than it reasonably should have.

The majority decision in Jordan marks a significantly
different approach to the unreasonable delays that many accused
face in today's complex and underfunded justice system. Prior
to Jordan, the courts applied a contextual analysis
without concrete numerical ceilings; the four-member dissent
authored by Cromwell J would have kept and refined that existing
framework.

Farmers in Québec paid into a voluntary assurance program
(the "Program"), administered by the
provincial government (La Financière), that protected
participants from having their income fall below a certain level
for certain agricultural products designated as
"insurable". The farmers objected to how La
Financière calculated the amounts paid out between
2006–2008, including because La Financière took into
account federal farm assistance.

The SCC majority held that, although the Program is administered
by a provincial authority, it is not an administrative contract,
but is in fact an innominate contract between private parties
governed by general contract law principles in the Civil Code of Québec. But the
Program is not an insurance contract governed by insurance
law sections of the Code because it does not contain the
three main characteristics set out in the Code.

The SCC also stated that the "reasonable expectations
rule"—which requires an insurer to consider the
reasonable expectations of the insured—only applies in cases
of contractual ambiguity, but not where contractual provisions are
unambiguous. La Financière acted in accordance with the
requirements of good faith and contractual fairness in
administering the program; thus, even if the reasonable
expectations rule applied, there was no violation of it.

Mennillo: Sloppy Paperwork Doesn't Impress, But
Didn't Oppress

In Mennillo v Intramodal inc, 2016 SCC
51, the SCC confirmed that a failure by a corporation to comply
with the Canada Business Corporations Act
("CBCA") does not, on its own,
constitute oppression. The oppression remedy is concerned with
"fairness and business realities, rather than narrow
legalities." This decision was flagged as one of the
Appeals to Watch in 2016 because oppression cases at the SCC
are rare, and the decision was previously discussed
here.

In Mennillo, the issue was whether a failure by the
corporation to observe the legal formalities in removing Mr.
Mennillo as a shareholder constituted oppression. The majority
found that although the corporation had engaged in sloppy
paperwork, it had not oppressed Mr. Mennillo. In reaching its
conclusion, the majority put great weight on a finding by the trial
judge that Mr. Menillo decided he no longer wanted to be a
shareholder. Therefore, in accordance with the principles
articulated in BCE Inc v 1976 Debentureholders, 2008 SCC
69, Mr. Mennillo had no reasonable expectation of being treated
as a shareholder and his oppression claim was groundless. In a
concurring judgment, McLachlin CJ wrote that the appeal could be
disposed of on the basis that Mr. Menillo failed to show a
reasonable expectation that he would not be removed as a
shareholder. Justice Côté dissented, stating that a
corporation's failure to comply with the strict requirements of
the CBCA may justify granting the oppression remedy.

Menillo shows that, in determining whether to grant the
oppression remedy, courts will take a contextual analysis that
centres around the reasonable expectation of the parties and
business realities of the case at hand.

RBC was a judgment creditor of two debtors and needed the
debtors' mortgage discharge statement—which contained
personal mortgage information about the debtors—in order to
obtain a sheriff's sale of the debtors' property. The
debtors refused to provide the discharge statement, so RBC asked
Scotiabank for a copy. At issue was whether the Personal Information Protection and Electronic
Documents Act
("PIPEDA") prevented Scotiabank
from disclosing the discharge statement to RBC without the
debtors' consent.

The SCC unanimously held that the PIPEDA did not
prevent Scotiabank from disclosing the mortgage statement to RBC.
Firstly, a lower court had jurisdiction to order the debtors to
produce the mortgage statement. This would be sufficient to bring
the mortgage statement within the exception in the PIPEDA
for disclosure of information pursuant to a court order.

Secondly, the mortgage information was not particularly
sensitive information. Legislation already requires public
disclosure of a large amount of mortgage information. The mortgage
information affected the rights of RBC and other creditors. RBC
could obtain the mortgage information through a court order anyway.
The debtors could not have a reasonable expectation that the
mortgage statement would be kept private from RBC. There was thus
implied consent to disclosure of the mortgage
statement.

A majority of the SCC set out the requirements for correcting a
contractual error under Québec civil law pursuant to art 1425 of the Civil Code of
Québec. A party seeking to correct the error must
prove that there are:

persons between whom the obligation
exists;

a prestation, which forms the
obligation's object, and the prestation is possible and
determinate or determinable and not forbidden by law or contrary to
public order; and

in the case of an obligation arising
out of a juridical act, a cause which justifies its existence.

It is insufficient for the parties to have a general intention
of a consequence. Rather, the parties need to have agreed upon a
precise juridical operation.

Similarly, in the common law provinces and territories,
equitable rectification is available if the applicant can prove the
following elements on a balance of probabilities with evidence
"exhibiting a high degree of clarity, persuasiveness and
cogency":

In cases where both parties made the
mistake, that:

the parties had reached a prior
agreement whose terms are definite and ascertainable;

the agreement was still effective when
the instrument was executed;

the instrument fails to record
accurately that prior agreement; and

if rectified as proposed, the
instrument would carry out the agreement;
OR

In cases where only one party made the mistake, that:

the other party knew or ought to have
known about the mistake; and

permitting the defendant to take
advantage of the erroneously drafted agreement would amount to
fraud or the equivalent of fraud.

The SCC majority narrowed the availability of rectification from
the test previously applied by, in particular, the Ontario courts.
Courts can only correct errors in the legal instrument
(such as typos), but not errors in the actual
agreement. Justices Abella and Côté dissented
in both decisions and would have given rectification a broader
scope.

The issue in Lizotte was whether litigation privilege
trumped a legislative provision that required an insurer to hand
over "any document" concerning the activities of a
representative whose professional conduct was being investigated.
The SCC confirmed that litigation privilege cannot be abrogated by
legislation absent a "clear, explicit and unequivocal
provision" to that effect. The statutory provision at issue
did not satisfy that high-threshold.

In University of Calgary, the SCC needed to decide
whether a legislative provision that required a public body to
produce records "[d]espite ... any privilege of the law of
evidence" abrogated solicitor-client privilege. The SCC
majority held that while "privilege of the law of
evidence" could encompass spousal communication privilege or
settlement privilege in the context of court proceedings, it did
not encompass solicitor-client privilege which is a substantive
rule and not merely an evidentiary one. Therefore, the provision at
issue was not "sufficiently clear, explicit and
unequivocal" to show that the legislature intended to set
aside solicitor-client privilege.

Lastly, in Chambres des notaries du Quebec (identified
as one of our
Appeals to Watch in 2016) the SCC held that provisions in the
Income Tax Act requiring notaries and
lawyers to produce certain documents to the Canada Revenue Agency
constituted an unreasonable search and seizure in contravention of
s. 8 of the Charter. The impugned
provisions did not require that the client be informed of the
production order, and they also placed the entire burden of
protecting the privilege on the notary or lawyer. Moreover, it was
not established that it was absolutely necessary in this context to
impair privilege. The impugned provisions did not minimally impair
the right to privilege and, therefore, could not be saved under s.
1 of the Charter.

Taken together, Lizotte, University of
Calgary, and Chambres des notaries du Quebec indicate
that courts will continue to zealously protect privilege from
government encroachment. This renewed and formidable defence of
privilege makes these three cases some of the most important
decisions of 2016.

Ledcor: Standard Form Operating Procedure

The top decision of 2016 goes to Ledcor Construction Ltd v Northbridge
Indemnity Insurance Co, 2016 SCC 37, previously discussed
here. In Ledcor, the SCC majority held that standard
form contracts are reviewable on a standard of correctness when the
interpretation at issue is of precedential value and there is no
meaningful factual matrix that is specific to the particular
parties to assist in the interpretive process. Ledcor
created a key exception to the SCC's landmark ruling in Sattva Capital Corp v Creston Moly Corp,
2014 SCC 53, which recognized that contractual interpretation
is a question of mixed fact and law since contracts are interpreted
in light of their factual matrix and therefore an appellate court
should apply the "palpable and overriding error" standard
of review (Sattva was previously discussed
here).

The issue in Ledcor was whether an insurer could deny
coverage of a claim for windows that had been damaged in a
construction project on the basis of an exclusion contained in a
standard form builder's risk policy. Writing for the
eight–member majority, Wagner J held that while contractual
interpretation is generally a question of mixed fact and law, in
situations involving standard form contracts, it is more
appropriately classified as a question of law. That is because the
parties to a standard form contracts typically do not negotiate
terms and the contract is put to the receiving party as a 'take
it or leave it' proposition. Furthermore, the interpretation of
a standard form contract could affect many people, and permitting
appellate courts to review standard form contracts for correctness
is consistent with the mandate of appellate courts "ensuring
consistency of the law".

Justice Cromwell, in dissent, wrote that standard form contracts
involve questions of mixed fact and law. While Cromwell J
acknowledged that standard form contracts do not involve much
negotiation, standard form contracts are still interpreted in light
of their purpose, the nature of the particular relationship between
the parties, and the market or industry within which they
operate.

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